Check your wallet: Rare paper bills to lose legal tender status

New law aims to put old money out of commission The Liberal government’s federal budget includes proposed legislation that would strip outdated Canadian bank notes of legal tender status.

A Canadian $1,000 bill will soon be worth a lot less – or potentially a lot more – than its face value under the 2018 federal budget.

A line in the budget shows the Liberals are planning to strip legal tender status from outdated Canadian bank notes, so $1, $2, $25, $500 and $1,000 bills will no longer be valid in cash transactions.

The government does not currently have the power to revoke legal tender status, but it plans to change that in order to remove outdated bank note denominations from circulation. The legacy bills will no longer be usable in day-to-day transactions, although banks will accept them at full value, the Bank of Canada (BoC) says.

No timeline has been set for the change, but the BoC says it will not happen “overnight,” and nothing can happen until the necessary legislation is passed on Parliament Hill. It says banking institutions will continue to accept the affected bills for a period of time, after which they’ll need to be sent directly to the BoC for redemption.

All bank notes released by the Bank of Canada since 1935 are currently considered legal tender. That will eventually change, but the BoC points out that it will still be legal to use such bills as payment, provided the buyer and seller agree on it.

The BoC says eliminating the older bills will help it ensure that only the most up-to-date bank notes are in circulation. “Newer bank notes have better security features that make them difficult to counterfeit, and they are in better condition overall,” the bank said in a page added to its website after the budget announcement.

The federal government says eliminating old bills from circulation will allow it to “better manage the money supply so that it is safe and secure for Canadians.”

Old bills

Those who remember the introduction of the loonie (1987) and the toonie (1996) probably still have memories – or even souvenirs – of the $1 and $2 bills that predated the coins. However, there are likely very few Canadians who have ever held a $25, $500 or $1,000 bill.

The only $25 bills in circulation were issued as commemorative bank notes in 1935, when the BoC was established. The bills, which marked the 25th anniversary of King George V’s ascension to the throne, feature images of the King and Queen Mary on one side, and an image of Windsor Castle on the reverse. Only 1,840 of the original 140,000 printed bank notes remain in circulation, according to the BoC.

Canada’s only $500 bill in circulation is also the only one to feature nudity. The bill, which was issued in 1935, depicts Sir John A. Macdonald on one face and a woman in a drooping robe on the other. The woman is reclining on a bountiful harvest and leaning against an apple-filled tree, with one of her breasts exposed. The image is meant to signify fertility.

Only 40 bills from the original printing of 20,900 remain in circulation.

The BoC produced four versions of the $1,000 bill before withdrawing it in 2000. The most recent one made its debut as part of the Birds of Canada series in 1986. That bill featured an image of the pine grosbeak bird on one side and Queen Elizabeth II on the other.

The first two versions of the $1,000 bill featured Sir Wilfrid Laurier on one side and an allegory for security, depicting a woman holding a child and a sword, on the other. The third version of the bill shows a landscape.

Five versions were produced of the $1 and $2 bills, respectively, before they were taken out of circulation, although one of the $1 bills was a commemorative edition.

The Bank of Canada says it will accept any of the outdated bills at face value, but there’s more money to be made by selling the rarer bills to collectors.

The $500 bill is perhaps the Holy Grail for Canadian currency aficionados. With just over three dozen of the bills in existence, they are extremely hard to come by – and extremely expensive to acquire. The value of one bill can range from $20,000 to $60,000, according to the website Canada Currency.

Other rare bank notes, such as the $25 bill, can also fetch tens of thousands of dollars at auction.

The BoC’s last count of affected bills in circulation, from the end of last year, is as follows:

These numbers do not include bank notes issued by the Dominion of Canada, individual provinces or defunct or chartered banks.